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The impact of the market transparency unit for fuels on gasoline prices in Germany

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  • Dewenter, Ralf
  • Heimeshoff, Ulrich
  • Lüth, Hendrik

Abstract

Increasing horizontal as well as vertical transparency in oligopolistic markets can be advantageous for consumers, due to reduced search costs. However, market transparency can also affect incentives to deviate from collusive agreements and the punishment by rival firms in the market. Using a panel of 27 European countries, we analyze the impact of increased market transparency via the introduction of a market transparency unit for fuels in Germany. Applying a difference-in-differences approach, we find evidence that both gasoline and diesel prices have increased. While consumers may be better off using a retail price app for fuels, gas stations are also able to compare prices at almost no cost.

Suggested Citation

  • Dewenter, Ralf & Heimeshoff, Ulrich & Lüth, Hendrik, 2016. "The impact of the market transparency unit for fuels on gasoline prices in Germany," DICE Discussion Papers 220, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:220
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    Cited by:

    1. Chiara Drolsbach & Maximilian Maurice Gail & Phil-Adrian Klotz, 2022. "Pass-through of Temporary Fuel Tax Reductions: Evidence from Europe," MAGKS Papers on Economics 202239, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Wein, Thomas, 2021. "Why abandoning the paradise? Stations incentives to reduce gasoline prices at first," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242362, Verein für Socialpolitik / German Economic Association.
    3. Drolsbach, Chiara Patricia & Gail, Maximilian Maurice & Klotz, Phil-Adrian, 2023. "Pass-through of Temporary Fuel Tax Reductions: Evidence from Europe," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277655, Verein für Socialpolitik / German Economic Association.
    4. José Manuel Ordóñez-de-Haro & Jordi Perdiguero & Juan-Luis Jiménez, 2020. "Fuel prices at petrol stations in touristic cities," Tourism Economics, , vol. 26(1), pages 45-69, February.
    5. Haucap, Justus & Heimeshoff, Ulrich & Siekmann, Manuel, 2016. "Selling gasoline as a by-product: The impact of market structure on local prices," DICE Discussion Papers 240, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Horvath, Marco, 2019. "Germany's market transparency unit for fuels: Fostering collusion or competition?," Ruhr Economic Papers 836, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Thomas Wein, 2021. "Why Abandon the Paradise? Stations’ Incentives to Reduce Gasoline Prices at First," Journal of Industry, Competition and Trade, Springer, vol. 21(4), pages 465-504, December.
    8. Jens‐Peter Loy & Dieter Pennerstorfer & Daniela Rroshi & Christoph Weiss & Biliana Yontcheva, 2022. "Consumer Information and Price Transmission: Empirical Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 70(3), pages 631-683, September.
    9. Christoph Kleineberg, 2020. "Market definition of the german retail gasoline industry on highways and those in the immediate vicinity," Working Paper Series in Economics 389, University of Lüneburg, Institute of Economics.
    10. Céline Bonnet & Jan Philip Schain, 2020. "An Empirical Analysis Of Mergers: Efficiency Gains And Impact On Consumer Prices," Journal of Competition Law and Economics, Oxford University Press, vol. 16(1), pages 1-35.
    11. Drolsbach, Chiara Patricia & Gail, Maximilian Maurice & Klotz, Phil-Adrian, 2023. "Pass-through of temporary fuel tax reductions: Evidence from Europe," Energy Policy, Elsevier, vol. 183(C).
    12. Dewenter Ralf & Schwalbe Ulrich, 2016. "Preisgarantien im Kraftstoffmarkt," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(3), pages 276-288, September.
    13. Institute of Economics, 2020. "Institut für Volkswirtschaftslehre Forschungsbericht 2019," Working Paper Series in Economics 388, University of Lüneburg, Institute of Economics.
    14. Dieter Pennerstorfer & Philipp Schmidt‐Dengler & Nicolas Schutz & Christoph Weiss & Biliana Yontcheva, 2020. "Information And Price Dispersion: Theory And Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 871-899, May.
    15. Eibelshäuser, Steffen & Wilhelm, Sascha, 2017. "Markets Take Breaks: Dynamic Price Competition with Opening Hours," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168247, Verein für Socialpolitik / German Economic Association.
    16. Martin, Simon, 2020. "Market transparency and consumer search - Evidence from the German retail gasoline market," DICE Discussion Papers 350, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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    Keywords

    market transparency unit; regulation; fuel prices; difference-in-differences;
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